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Top line growth will continue to be focus in 2011, Gap Inc
25 Feb '11
6 min read
Additional Results and 2011 Outlook
The company expects diluted earnings per share to be in the range of $1.88 to $1.93 for fiscal year 2011.
Fiscal year 2010 depreciation and amortization expense, net of amortization of lease incentives, was $562 million. The company expects depreciation and amortization expense, net of amortization of lease incentives, for fiscal year 2011 to be about $550 million.
Fourth quarter operating expenses were $1.1 billion, down $10 million from the prior year. Marketing expenses for the fourth quarter were $160 million.
Fiscal year 2010 operating expenses were $3.9 billion, about flat to last year. Marketing expenses for the full year were $516 million.
The company expects that operating margin for fiscal year 2011 will likely decrease driven by pressure from sourcing cost inflation.
The effective tax rate was 38.9 percent for the fourth quarter of fiscal year 2010. The effective tax rate for fiscal year 2010 was 39.3 percent. The company expects the effective tax rate to be about 39 percent for fiscal year 2011.
On a year-over-year basis, the company reported that inventory per square foot was up 9 percent at the end of the fourth quarter of fiscal year 2010.
Given Gap Inc.'s objective to at least maintain sales in downsized stores in North America, the company is transitioning to a new metric, inventory per store. On a year-over-year basis, inventory per store was up 8 percent at the end of the fourth quarter of fiscal year 2010. The company expects inventory per store at the end of the first quarter of fiscal year 2011 to be up in the high single digits compared with the first quarter of fiscal year 2010.
The company paid a dividend of $0.10 per share during the fourth quarter.
The company also announced that its Board of Directors intends to increase the annual dividend per share from $0.40 in fiscal year 2010 to $0.45 for fiscal year 2011. The Board of Directors declared the first quarterly dividend of $0.1125 per share payable on or after April 27, 2011 to shareholders of record at the close of business on April 6, 2011. Additional quarterly dividends are expected to be paid in July, October and January.
Capital Expenditures
Fiscal year 2010 capital expenditures were $557 million. The company expects fiscal year 2011 capital spending to increase to about $575 million, driven by investments in global expansion and to support continuation of Old Navy store remodels.
In fiscal year 2010, the company opened 118 stores weighted towards international outlets and franchise, and closed 103 stores weighted towards Gap North America.
The company ended fiscal year 2010 with 3,246 store locations in 31 countries, and net square footage of company-owned stores decreased 2 percent from the end of fiscal year 2009.
In fiscal year 2011, the company expects to open about 190 stores of which 125 are international including franchise stores. The company expects that it will close about 125 stores, weighted towards Gap North America. Full year net square footage for company-owned stores is expected to decrease by about 3 percent for fiscal year 2011 compared with the previous year.
The company expects diluted earnings per share to be in the range of $1.88 to $1.93 for fiscal year 2011.
Fiscal year 2010 depreciation and amortization expense, net of amortization of lease incentives, was $562 million. The company expects depreciation and amortization expense, net of amortization of lease incentives, for fiscal year 2011 to be about $550 million.
Fourth quarter operating expenses were $1.1 billion, down $10 million from the prior year. Marketing expenses for the fourth quarter were $160 million.
Fiscal year 2010 operating expenses were $3.9 billion, about flat to last year. Marketing expenses for the full year were $516 million.
The company expects that operating margin for fiscal year 2011 will likely decrease driven by pressure from sourcing cost inflation.
The effective tax rate was 38.9 percent for the fourth quarter of fiscal year 2010. The effective tax rate for fiscal year 2010 was 39.3 percent. The company expects the effective tax rate to be about 39 percent for fiscal year 2011.
On a year-over-year basis, the company reported that inventory per square foot was up 9 percent at the end of the fourth quarter of fiscal year 2010.
Given Gap Inc.'s objective to at least maintain sales in downsized stores in North America, the company is transitioning to a new metric, inventory per store. On a year-over-year basis, inventory per store was up 8 percent at the end of the fourth quarter of fiscal year 2010. The company expects inventory per store at the end of the first quarter of fiscal year 2011 to be up in the high single digits compared with the first quarter of fiscal year 2010.
The company paid a dividend of $0.10 per share during the fourth quarter.
The company also announced that its Board of Directors intends to increase the annual dividend per share from $0.40 in fiscal year 2010 to $0.45 for fiscal year 2011. The Board of Directors declared the first quarterly dividend of $0.1125 per share payable on or after April 27, 2011 to shareholders of record at the close of business on April 6, 2011. Additional quarterly dividends are expected to be paid in July, October and January.
Capital Expenditures
Fiscal year 2010 capital expenditures were $557 million. The company expects fiscal year 2011 capital spending to increase to about $575 million, driven by investments in global expansion and to support continuation of Old Navy store remodels.
In fiscal year 2010, the company opened 118 stores weighted towards international outlets and franchise, and closed 103 stores weighted towards Gap North America.
The company ended fiscal year 2010 with 3,246 store locations in 31 countries, and net square footage of company-owned stores decreased 2 percent from the end of fiscal year 2009.
In fiscal year 2011, the company expects to open about 190 stores of which 125 are international including franchise stores. The company expects that it will close about 125 stores, weighted towards Gap North America. Full year net square footage for company-owned stores is expected to decrease by about 3 percent for fiscal year 2011 compared with the previous year.
Gap Inc
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